Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades. Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two support departments, systems design and programming services. The sources and uses of the support department time are summarized as follows: From Design Programming 5,000 400 Labor and materials (all variable). Depreciation and other fixed costs Total To Design Programming The costs in the two service departments are as follows: Department A Department B 1,000 9,000 600 1,000 a. Direct Method b. Step Method (Design Department goes first) The Reciprocal Method (using Solver) Design $ 95,000 67,000 $ 162,000 Programming $ 63,000 4,000 $ 67,000 Required: 1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method (design department goes first), and (c) the reciprocal method. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Department A Department B $ $ S Total Labor Hours 15,000 2,000 Total 0 0
Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades. Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two support departments, systems design and programming services. The sources and uses of the support department time are summarized as follows: From Design Programming 5,000 400 Labor and materials (all variable). Depreciation and other fixed costs Total To Design Programming The costs in the two service departments are as follows: Department A Department B 1,000 9,000 600 1,000 a. Direct Method b. Step Method (Design Department goes first) The Reciprocal Method (using Solver) Design $ 95,000 67,000 $ 162,000 Programming $ 63,000 4,000 $ 67,000 Required: 1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method (design department goes first), and (c) the reciprocal method. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Department A Department B $ $ S Total Labor Hours 15,000 2,000 Total 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These
products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for
large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades.
Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two
support departments, systems design and programming services. The sources and uses of the support department time
are summarized as follows:
From
Design
400
Design
Programming
The costs in the two service departments are as follows:
To
Programming Department A Department B
5,000
1,000
9,000
600
1,000
Labor and materials (all variable)
Depreciation and other fixed costs
Total
a. Direct Method
b. Step Method (Design Department goes first)
c. The Reciprocal Method (using Solver)
Design
$ 95,000
67,000
$ 162,000
Programming
$ 63,000
4,000
$ 67,000
Required:
1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method
(design department goes first), and (c) the reciprocal method. (Do not round intermediate calculations. Round your final answers to
nearest whole dollar amount.)
Department A
Department B
$
SA
$
Total
Labor
Hours
15,000
2,000
Total
0
0
0
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